Last week, Damien Croteaux-Chonka’s letter cited Minneapolis as an example of a place where rents have gone down from building many more units and as a model for creating affordable housing elsewhere. Lacking direct evidence, he cites an article by Christian Britschgi, in the libertarian magazine Reason, who pays homage to Ayn Rand, asserting that “the lesson from Minneapolis is…. Slashing regulation with Randian abandon will do a better job of legalizing housing in a way that leads to…falling prices.”
He is mistaken, however, about key facts and ignores others that disprove his argument. First, rents in Minneapolis are rising, not falling, according to Britschgi’s own sources, with 1-Br and 3- Br rents already exceeding 2018’s levels, i.e., when the city started a building boom creating 11,000 new rental units, a 15% increase, in four years.
Its sister city, Saint Paul, meanwhile, built one-third as many units as from 2010 – 2020 and fewer since then. Anomalously, in 2022 rents rose less there than in Minneapolis.
Britschgi also ignores the effects of the George Floyd riots and the city’s eventual recovery. Rents fell strongly after these events, as, “with $500 million in damage to the Twin Cities, (these) protests are the second-costliest civil disturbance in U.S. history behind the 1992 riots in Los Angeles.” As the city rebuilds, rents are rising again.
Minneapolis also invests heavily in low-income housing and has stricter affordability requirements than Boston (or Newton), with 13.1% of its residents living in public housing versus Boston’s 8.6%. Likewise, its inclusionary zoning requirements aim to house those making 30% and 50% of Area Median Income, rather than Newton’s 65% – 80%.
By reducing competition for market-rate apartments, these policies dampen the bidding up of their prices, a policy norm Newton might consider.
Peter Bruce
